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Montana Administrative Register Notice 37-476 No. 12   06/25/2009    
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BEFORE THE DEPARTMENT OF PUBLIC

HEALTH AND HUMAN SERVICES OF THE

STATE OF MONTANA

 

In the matter of the amendment of ARM 37.40.307 and 37.40.361 pertaining to Medicaid nursing facility reimbursement

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NOTICE OF PUBLIC HEARING ON PROPOSED AMENDMENT

 

TO:  All Concerned Persons

 

            1.  On July 22, 2009, at 10:30 a.m., the Department of Public Health and Human Services will hold a public hearing in the auditorium of the Department of Public Health and Human Services Building, 111 North Sanders, Helena, Montana, to consider the proposed amendment of the above-stated rules.

 

2.  The Department of Public Health and Human Services will make reasonable accommodations for persons with disabilities who wish to participate in this rulemaking process or need an alternative accessible format of this notice.  If you require an accommodation, contact Department of Public Health and Human Services no later than 5:00 p.m. on July 13, 2009, to advise us of the nature of the accommodation that you need.  Please contact Rhonda Lesofski, Department of Public Health and Human Services, Office of Legal Affairs, P.O. Box 4210, Helena, Montana, 59604-4210; telephone (406) 444-4094; fax (406) 444-9744; or e-mail dphhslegal@mt.gov.

 

3.  The rules as proposed to be amended provide as follows, new matter underlined, deleted matter interlined:

 

            37.40.307  NURSING FACILITY REIMBURSEMENT  (1) remains the same.

            (2)  Effective July 1, 2001, and in subsequent rate years, nursing facilities will be reimbursed using a price based reimbursement methodology.  The rate for each facility will be determined using the operating component defined in (2)(a) and the direct resident care component defined in (2)(b):

            (a) through (c) remain the same.

            (d)  The total payment rate available for the period July 1, 2008 2009 through June 30, 2009 2010 will be the rate as computed in (2), plus any additional amount computed in ARM 37.40.311 and 37.40.361.

            (3)  Providers who, as of July 1 of the rate year, have not filed with the department a cost report covering a period of at least six months participation in the Medicaid program in a newly constructed facility shall have a rate set at the statewide median price as computed on July 1, 2008 2009.  Following a change in provider as defined in ARM 37.40.325, the per diem rate for the new provider shall be set at the previous provider's rate, as if no change in provider had occurred.

            (4) through (12) remain the same.

 

AUTH:  53-2-201, 53-6-113, MCA

IMP:  53-6-101, 53-6-111, 53-6-113, MCA

 

            37.40.361  DIRECT CARE WAGE REPORTING/ADDITIONAL PAYMENTS FOR DIRECT CARE WAGE AND BENEFITS INCREASES  (1)  Effective for the period July 1, 2007 2009 and every for the six months thereafter, nursing facilities must report to the department actual hourly wage and benefit rates paid for all direct care and ancillary services workers or the lump sum payment amounts for all direct care and ancillary services workers that will receive the benefit of the increased funds.  The reported data shall be used by the department for the purpose of comparing types and rates of pay payment for comparable services and tracking distribution of direct care wage funds to designated workers.

            (2)  The department will pay Medicaid certified nursing care facilities located in Montana that submit an approved request to the department a lump sum a per day add-on payment in addition to the amount paid as provided in ARM 37.40.307 and 37.40.311 as an add-on to their computed Medicaid payment rate to be used only for wage and benefit increases or lump sum payments for direct care or ancillary services workers in nursing facilities.

            (a)  The department will determine a per day add-on payment, the lump sum payments, twice a year commencing July 1, 2007 2009, and again in six months from that date and at the beginning of each state fiscal year thereafter, as a pro rata share of appropriated funds allocated for increases in direct care and ancillary services wages and benefits or lump sum payments to direct care and ancillary services workers.

            (b)  To receive the direct care add-on lump sum payment, a nursing facility shall submit for approval a request form to the department stating how the direct care add-on and ancillary services lump sum payment will be spent in the facility to comply with all statutory requirements.  The facility shall submit all of the information required on a form to be developed by the department in order to continue to receive the additional add-on amount subsequent lump sum payment amounts for the entire rate year.  The form for wage and benefit increases will request information including but not limited to:

            (i)  the number by category of each direct care and ancillary services worker that will receive the benefit of the increased funds, if these funds will be distributed in the form of a wage increase;

            (ii)  the actual per hour rate of pay before benefits and before the direct care wage increase has been implemented for each worker that will receive the benefit of the increased funds;

            (iii)  the projected per hour rate of pay with benefits after the direct wage increase has been implemented;

            (iv)  the number of staff receiving a wage or benefit increase by category of worker, effective date of implementation of the increase in wage and benefit; and

            (vi) (v)  the number of projected hours to be worked in the budget period.

            (c)  If these funds will be used for the purpose of providing lump sum payments (i.e. bonus, stipend or other payment types) to direct care and ancillary services workers in nursing care facilities the form will request information including, but not limited to:

            (i)  the number by category of each direct care and ancillary services worker that will receive the benefit of the increases funds;

            (ii)  the type and actual amount of lump sum payment to be provided for each worker that will receive the benefit of the lump sum funding;

            (iii)  the breakdown of the lump sum payment by the amount that represents benefits and the direct payment to workers by category of worker; and

            (iv)  the effective date of implementation of the lump sum benefit.

            (c) (d)  A facility that does not submit a qualifying request for use of the funds distributed under (2), that includes all of the information requested by the department, within the time established by the department, or a facility that does not wish to participate in this additional funding amount shall not be entitled to their share of the funds available for wage and benefit increases or lump sum payments for direct care and ancillary services workers.

            (3) remains the same.

 

AUTH:  53-2-201, 53-6-113, MCA

IMP:  53-2-201, 53-6-101, 53-6-111, 53-6-113, MCA

 

            4.  The Department of Public Health and Human Services (the department) is proposing the amendment of ARM 37.40.307 and 37.40.361 pertaining to Medicaid nursing facility reimbursement.  The proposed amendments are necessary to implement legislative funding increases for nursing facility reimbursement for state fiscal year 2010.  Funding available July 1, 2009 is currently projected at $155,121,704 to provide rate increases for nursing facility providers. 

 

The proposed amendments are also necessary to implement funding that allows wage increases for nursing facility direct care workers.  Funding available July 1, 2009 provides for a one time direct care worker wage increase.  The proposed rate increase for direct care and ancillary staff is limited to the 2010 through 2011 biennium only.

 

ARM 37.40.307

 

The department does not at the time of publication, have all of the information necessary to calculate final payment rates for nursing facility providers according to the methodology at ARM 37.40.307.  This methodology is explained below.  The department intends to make rates effective July 1, 2009.  The final rates will be set according to final case mix information and the funding appropriated by the 2009 Montana Legislature.

 

The department will deliver rate sheets to all providers in advance of the rule hearing.  The rate sheets will verify proposed rates and are intended to facilitate comments.  They will be delivered as soon as case mix information, Medicaid utilization data, and other details necessary to compute accurate reimbursement rates become available.  The rates will distribute the funding as necessary to meet the department goals of a price based system of reimbursement and will be computed so as to incorporate and implement legislatively appropriated funding levels.

 

The price based system of reimbursement is intended to address the following issues.  Statewide occupancy rates are at 74% in Montana nursing facilities at the current time.  At the same time, the care needs of the typical nursing facility resident are increasing.  Residents are being admitted at an older age with medically fragile and complex care needs that can no longer be met in home or community settings.  As these trends towards lower occupancy and increased acuity continue, it becomes more important than ever those nursing facility providers receive rate increases that are reflective of the increased cost of doing business.  If Medicaid rates do not stabilize, small rural providers of nursing facility services will find it more difficult to keep their doors open.  They would be unable to predict the level of funding that would be available in future years and could be unable to plan the best way to provide nursing facility services in their communities.  Increased costs due to lower occupancy levels and unpredictability of the system of reimbursement are likely to be passed on to the privately paying individuals and insurers.

 

For rate year 2010 (July 1, 2009 - June 30, 2010) the nursing facility per diem rate will be computed as follows:

 

            (1)  The Medicaid per diem rates will include two components.  The operating component (includes both operating and capital combined), is the same rate for all nursing facilities and represents 80% of the overall price.  The nursing component will be adjusted for individual nursing facility acuity and is 20% of the overall price.

 

            (2)  Medicaid per diem rates will be established annually each July 1st.

 

            (3)  The minimum data set (MDS) case mix assessment data will be used in the computation of each facility's resident acuity.  Each nursing facility's case mix index will be calculated quarterly based upon a set point in time, using the most recent annual or quarterly MDS information.  Nonclassifiable MDS assessment will be excluded from the computation of case mix indexes (CMIs) during the transition period.  Medicaid case mix for annual rate setting will be based on the most recent four quarter average of Medicaid CMIs for each nursing facility.

 

Provider rate increase

 

Total funding of approximately $2,981,100 will be available to provide a rate increase for nursing facility providers.  This funding will be allocated through the regular reimbursement process as part of the per diem rate calculation.  This funding is provided through the American Recovery and Reinvestment Act of 2009 and as such, will not be available in future years after this biennium.

 

ARM 37.40.361

 

Total funding of approximately $5,729,330 will be available to provide for a one time direct care worker wage increase.  This direct care wage increase is for direct care and ancillary staff for the state 2011 biennium only.  This funding will be allocated to facilities in addition to the regular per diem rate, and can only be used to provide for worker wage increases.  The department will identify the reporting form that will be used by providers in order to receive this additional funding for wages.  The form will identify which workers will receive these funds, if these funds will be distributed in the form of a stipend or bonus or in the form of a wage increase.  The funds are available one time only and as such will not be an ongoing reimbursement source after state fiscal year 2011.  Providers should be aware that any funds put into their wage structure may not be available in future years after this biennium.  The allocation methodology currently proposed by the department will be used to prorate these funds to Medicaid participating nursing facilities.

 

Persons and entities affected

 

There are 83 nursing facility services providers enrolled in Montana Medicaid.  All will be affected by the proposed amendments.

 

Estimated financial /budget impacts

 

The total state and federal funding available for state fiscal year 2010 is currently projected at $155,121,704.  This is comprised of $17,279,302 in state special revenue, $31,743,507 in state general funds and $106,098,895 in federal funds.  This funding includes $2,981,100 appropriated for the provider rate increase, as well as additional funding for lump sum payments to providers for direct care workers and ancillary staff of $1,350,430 of general funds and $4,378,927 in federal funds for a total appropriation of $5,729,330 for the nursing facility program.

 

The estimated total funding available for state fiscal year 2010 for nursing facility reimbursement is estimated at approximately $187,334,042 of combined state funds, federal funds, and $32,212,338 in patient contributions.  These numbers do not include at risk provider funds.  Anticipated utilization days for state fiscal year 2010 are 1,133,838 using estimates of caseload adopted by the Legislature.

 

The estimated total funding effects of the one time payments to "at risk" nonstate governmental providers and other nursing facilities not determined to be "at risk", has been appropriated at $5,125,779 in total funds, $1,673,022 of which comes from state special revenue funds and approximately $3,452,757 from federal funding sources.

 

            5.  The department intends to apply these rules retroactively to July 1, 2009.  The legislative funding increases will be available July 1, 2009 to provide for these increases in reimbursement, as well as other increases, that are being proposed in this rule for fiscal year 2010.  This date will comply with legislative directives for funding increases for nursing facilities.  If the rules must be applied retroactively, no harm to providers or recipients of Medicaid services would occur due to the total funding available for reimbursement.

 

            6.  Concerned persons may submit their data, views, or arguments either orally or in writing at the hearing.  Written data, views, or arguments may also be submitted to: Rhonda Lesofski, Department of Public Health and Human Services, Office of Legal Affairs, P.O. Box 4210, Helena, Montana, 59604-4210; fax (406) 444-9744; or e-mail dphhslegal@mt.gov, and must be received no later than 5:00 p.m., July 23, 2009.

 

7.  The Office of Legal Affairs, Department of Public Health and Human Services, has been designated to preside over and conduct this hearing.

 

8.  The department maintains a list of interested persons who wish to receive notices of rulemaking actions proposed by this agency. Persons who wish to have their name added to the list shall make a written request that includes the name, e-mail, and mailing address of the person to receive notices and specifies for which program the person wishes to receive notices.  Notices will be sent by e-mail unless a mailing preference is noted in the request.  Such written request may be mailed or delivered to the contact person in 6 above or may be made by completing a request form at any rules hearing held by the department.

 

9.  An electronic copy of this Proposal Notice is available through the Secretary of State's web site at http://sos.mt.gov/ARM/Register.  The Secretary of State strives to make the electronic copy of the Notice conform to the official version of the Notice, as printed in the Montana Administrative Register, but advises all concerned persons that in the event of a discrepancy between the official printed text of the Notice and the electronic version of the Notice, only the official printed text will be considered.  In addition, although the Secretary of State works to keep its web site accessible at all times, concerned persons should be aware that the web site may be unavailable during some periods, due to system maintenance or technical problems.

 

10.  The bill sponsor contact requirements of 2-4-302, MCA, do not apply.

 

 

 

 

/s/  John Koch                                                /s/  Anna Whiting Sorrell                              

Rule Reviewer                                               Anna Whiting Sorrell, Director

                                                                        Public Health and Human Services

           

Certified to the Secretary of State June 15, 2009.

 

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